Earlier this month three South African ad agencies - Herdbuoys
McCann-Erickson, Skotaville Communications Group and Azaguys Advertising
& Marketing - lodged a joint complaint with the Public Protector over
the awarding of Government contracts to a fourth party, The Agency.
In the complaint they claim that The Agency, which is 100 per cent owned
by the listed communications group, Billboard, could have provided a
misleading submission in relation to its shareholding and black economic
The law in South Africa states that previously disadvantaged individuals
or institutions will be looked at favourably for Government tenders. At
least 30 per cent of company management should represent these
The Agency’s chairman, Johan Huyser, has stated that 51 per cent of his
company’s equity was in the hands of black shareholders (Business
Report, 2 May). An advertisement for The Agency states that ’we are the
largest and leading truly black-owned agency’.
A source close to the dispute said: ’There has been a lack of full
disclosure on the part of The Agency. It claims to be an empowered group
but that has never been proved. The issue of empowerment should not be
The submission specifically relates to the awarding of the Telkom, Post
Office and Metro rail accounts - together worth about R125 million - to
The Agency, but an investigation into other accounts is now being
requested. These include the National Parks Board, the South African
Bureau of Standards and the Department of Labour.
Telkom has instructed its external auditor, Pricewaterhouse, to review
the ownership structure of The Agency at the time of tender.
’This is the biggest load of rubbish I’ve heard in my life,’ Huyser
’We are a public company and will give our full co-operation to the
Public Protector if it decides to contact us - but it hasn’t yet. We are
the most empowered company in the country, we are winning the business
and others don’t like that. This is about professional jealousy.’
At the beginning of the year, the Post Office requested submissions for
a credentials pitch for its marketing and advertising account, which was
subsequently awarded to The Agency. There are additional allegations
fuelling the dispute that The Agency was privy to information from the
Post Office at this stage which was withheld from other agencies.
In a letter from the Post Office’s senior general manager for human
resources to an unsuccessful agency, he says the account was awarded to
The Agency because of its ’ability to do the job, price and black
The submission to the Public Protector argued that no reference to price
was mentioned in the invitation to tender and so could not have been a
criterion. This has raised the question of why, if this was the case,
The Agency had access to information its rivals did not. The dispute is
expected to be resolved by the end of the month.